Deadly floods swept across the United States in 2025 at an unprecedented pace, underscoring the growing risk of inland and flash flooding and the critical importance of adequate flood insurance, according to the Insurance Information Institute’s (Triple-I’s) latest issues brief, Flood Insurance: State of the Risk. From Central Texas to California, North Carolina and New York City, communities experienced widespread devastation, including more than 130 fatalities in the Texas Hill Country alone.
Flooding triggered by tropical storms, severe convective storms and atmospheric rivers caused significant property damage nationwide. New York City saw multiple flash floods, while California experienced winter storms that dropped up to nearly half a year’s worth of rain in some areas, leading to mudflows and hundreds of affected homes. In North Carolina, residents are still recovering from catastrophic flooding tied to Hurricane Helene in autumn 2024. In some of the hardest-hit communities, fewer than 1% of households carried flood insurance, leaving many families to rely on federal disaster assistance or personal savings to rebuild.
Flood Insurance Gaps and Market Growth
Despite the rising risk, many homeowners believe flood coverage is unnecessary unless required by a mortgage lender, and some drop coverage once their mortgage is paid. A 2023 survey by Munich Re and the Triple-I found that 64% of homeowners believed their residences were not at risk of flooding. More than half of flood insurance policyholders are covered through FEMA’s National Flood Insurance Program (NFIP), though private insurers are expanding rapidly. Between 2016 and 2024, private flood insurance grew nearly 43%, from $3.29 billion in direct premiums to $4.7 billion, with 79 private companies writing just over 27% of the U.S. market.
Advanced analytics and improved data collection, including work by nonprofit Climate Central, are helping insurers better assess flood risk and expand coverage options. These insights are critical for both private insurers and communities aiming to build resilience against future floods.
Incentivizing Risk Reduction
Programs like NFIP’s Community Rating System (CRS) encourage communities to adopt floodplain management practices beyond minimum standards, offering premium discounts of up to 45% for homeowners in top-rated communities. Investments in resilience, such as mitigation projects and community planning, have been shown to save up to $33 in avoided economic costs for every dollar spent.
Recent cancellations of programs like FEMA’s Building Resilient Infrastructure and Communities (BRIC) funding and EPA’s Community Change Grants illustrate the ongoing challenges in securing mitigation funding, particularly for vulnerable populations, including Native American communities.
“Flooding is not only a growing threat, but it’s a collective challenge that requires action at every level, from individuals, businesses and government,” said Sean Kevelighan, Triple-I CEO. “Investing in flood insurance and mitigation measures today can dramatically reduce the human and economic costs of tomorrow’s disasters.”
About the Insurance Information Institute (Triple-I)
Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.
About The Institutes
The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes 20 affiliated business units and backed by more than 115 years of experience as a trusted knowledge partner, we empower people and organizations to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world. Learn more at Global.TheInstitutes.org.
The Institutes is a registered trademark of The Institutes. All rights reserved.
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“Flooding is not only a growing threat, but it’s a collective challenge that requires action at every level, from individuals, businesses and government."
